About The Company
About The Company
About The Company
Wipro was founded in the year of 1945, in preindependent India. Starting off with consumer products business, Wipro then diversified into newer areas including IT hardware and IT services. Such has been the dynamic power of the organization that over the past 50 years, Wipro has evolved into a leading global IT company, a company which has pioneered many an innovation in the IT services, BPO and R&D services space. Headquarter at Bangalore, India. Wipro implemented the philosophy of 'Applying Thought', thereby helping clients to "Do Business Better".
Business Units 1) Wipro Consumer Care & Lighting Customer-based innovation 2) Wipro Infrastructure Engineering Building Precision 3) Wipro GE Healthcare Private Limited Advanced Healthcare Products 1) Wipro Systems and technology 2) Infrastructure technology and solutions Services 1) Analytics and Information Management 2) Business Application Services 3) Mobility 4) Business Process Outsourcing 5) Cloud Services 6) Consulting Services 7) Eco Energy 8) Product Engineering Services 9) Infrastructure Management Services Management Team Chairman - Azim H. Premji CEO, IT Business & Executive Director - T K Kurien Executive Director & Chief Finance Officer - Suresh C Senapaty Other Independent Directors are Ashok S. Ganguly, B. C. Prabhakar , Dr. Henning Kagermann , Jagdish N. Sheth , M. K. Sharma , Narayanan Vaghul , Priya Mohan Sinha , Shyam Saran , Vyomesh Joshi , William Arthur Owens Achievements 1) Wipro Technologies and British Telecom win 'Offshoring Project of the Year' award at National Outsourcing Association Awards 2012. 2) Wipro ranked No 2 in the Global 500 listing of Newsweek's Green Company Rankings 2012. 3) Wipro is the highest ranked gadget maker in Greenpeace's latest green guide to electronics 2012. 4) Wipro rated as a Leader in Business Technology Transformation by Independent Research Firm. 5) High Performance Brand Award from All India Management Association. 6) Named as one of the most ethical companies by Ethisphere Institute 2012.
Company has not accepted any fixed deposits. Hence, there is no outstanding amount as on the Balance Sheet date. Green Initiatives in Corporate Governance Ministry of Corporate affairs have permitted companies to send electronic copies of Annual Report, notices, quarterly results intimation about dividend etc., to the e-mail IDs of shareholders. Company is accordingly arranging to send soft copies of these documents to the email IDs of shareholders available with us or with our depositories. Wipros R&D Activities: 201112 Strengthening the portfolio of Applied Research, Centers of Excellence (CoE), Customer Coinnovation, Cloud, Mobility, Analytics, Solution Accelerators, and Software Engineering Tools & Methodologies, have been the focus of Wipros Research and Development (R & D) activities. Expenditure on R & D During the year, under review, Company incurred an expenditure of ` 1,904 million includes capital expenditure in continued development of R & D activities.
Revenue from IT Services increased by 21.1%. In US dollar terms revenue increased by 13.4% from US$ 5,221 million to US$ 5,921 million. This increase is primarily on account of increase in volume by 11.5% and increase in onsite-offshore mix by 1.3%. Gross profit to revenue percentage declined by 209 bps during the year. This decline in gross margin is primarily on account of lower employee utilization rates and an increase in personnel compensation cost during the year. Further, integration of SAIC acquisition from June 2011 has contributed to a decline in gross margin by 50 bps. During the current year, company realised 53.8% of revenue from work done in locations outside India (Onsite) and remaining 46.2% of revenue was realised from the work performed from development centres in India (Offshore). Revenue contribution from Fixed Price Projects (FPP) is 45.7% for the year. In FPP, company undertakes to complete project within agreed timeline at a fixed price for a given scope of work. The economic gains or losses realized from completing the project earlier or later than initially projected timelines or at lower or higher efforts accrues to company. Consumer Care and Lighting revenue increased by 22.5%. This increase is attributable to an increase of approximately 24.1% in revenue from consumer products including Yardley products sold in Indian markets and an increase of approximately 20% in revenue from personal care products sold in southeast Asian markets. The growth in revenues in Indian markets is primarily due to an increase in revenue from toilet soap products, domestic lighting and institutional business. Companys gross profit as a percentage of our revenues from the Consumer Care and Lighting segment decreased by 117 bps. The increase in major input costs has primarily contributed to reduction in gross margin.
Contractual obligations The table of future payments due under known contractual commitments as of March 31, 2012, aggregated by type of contractual obligation, is given below:
According to the CA Natrajh Ramakrishna there is adequate internal control system with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. Also it was observed by him that Wipro does not have any major weakness in the internal control system during the course of the audit. All the information and explanations, which to the best of their knowledge and belief were necessary for the purposes of audit.Proper books of account as required by law have been kept by the Company.
The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account also comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act On the basis of written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, it was reported that none of the directors are disqualified as of March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act
In their opinion the said accounts give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: o In the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and o In the case of the cash flow statement, of the cash flows of the Company for the year ended on that date.
2012
2011
Change
% change
Assets Non-Current Assets Fixed Assets Non-Current Investments Deferred tax assets Long term Loans and advances Other non-current assets
2012
2011
change
% change
4917 2,38,608
4908 2,08,294
9 30314
0.18 14.55
Total shareholders funds Non Current Liabilities Long Term Borrowings Deferred tax liabilities Others Long Term Provisions Total Non Current Liabilities Current liabilities and provisions Short Term Borrowings Trade payables Other Current liabilities Provisions Net current liabilities Total liabilities
2,43,525
2,13,202
30323
14.22
131377
124076
7301
5.88
22022
19354
2668
13.79
40409
47950
-7541
-15.73
58
58
7851
7249
602
8.30
355 2593
2659 2737
-2304 -144
-86.65 -5.26
Trade Receivables Cash & Bank Balances Short Term Loans & Advances Other Current Assets
79670 62328
57813 52033
21857 10295
37.81 19.79
25028
24750
278
1.12
33211
24835
8376
33.73
31,113
27,242
3871
14.21
30,410
27,754
2656
9.57
2,54,582
2,17,122
37460
17.25
38,922 20,507
36,099 12,454
2823 8053
7.82 64.66
27,567 1,17,406
26,939 1,03,246
628 14160
2.33 13.71
3,85,959
3,41,198
44761
13.12
Total assets
3,85,959
3,41,198
44761
13.12
2012 (1)Income Income from operations Less: Excise Duty Other income Total (2)Expenditure Cost of Materials consumed Purchases of stock in trade Change in inventories of finished goods, WIP and stock in Trade Employee Benefits Finance Costs Depreciation expense Amortization expense Other Expenses Total Expenses Profit Before Tax Tax Expense Current Tax Deferred Tax Total Tax Expense Net profit 12,495 -160 12,335 46,851 14,475 32,086 449
3,29,103 2,69,812
It can be seen that major contribution of liabilities is from shareholders funds which is 63% of the total.
The detailed contribution for each component is given in the chart below:
2012 (in Rs.million) Shareholders funds Share capital Reserves and surplus 4,917 238,608 243,525
2011
2012 (in %)
2011
Non-current liabilities Long term borrowings Other long term liabilities Long term Provisions 22,022 355 2,593 25,028 Current Liabilities Short term borrowings Trade payables Other current liabilities Short term provisions 30,410 38,922 20,507 27,567 117,406 TOTAL EQUITY AND LIABILITIES 385,959 27,754 36,099 12,454 26,939 103246 341,198 7.88 10.08 5.31 7.14 30.42 100.00 19,354 2,659 2,737 24750 5.71 0.09 0.67 6.48
0.00 5.67 0.78 0.80 7.25 0.00 8.13 10.58 3.65 7.90 30.26 100.00
ASSETS:
Current assets formed the major contributor with a percentage of 65.96%. The details about the contribution of each component is given in the below table:
2012
2011
2012 (in %)
2011
(in Rs.million) Non-current assets Fixed assets Tangible assets Intangible assets and goodwill Capital work-in-progress Non-current investments Deferred tax assets Long term loans and advances Other non-current assets 49,510 41,961 4,537 3,012 62,943 326 9,404 9,194 131,377 Current assets Current investments Inventories Trade receivables Cash and bank balances Short term loans and advances Other current assets 40,409 7,851 79,670 62,328 33,211 31,113 254,582 TOTAL ASSETS 385,959 47,950 7,249 57,813 52,033 24,835 27,242 217122 341,198 46,334 41,045 1,325 3,964 60,184 108 9,627 7,823 124076
13.58 12.03 0.39 1.16 17.64 0.03 2.82 2.29 36.36 0.00
329,103 269,812
From the table it can be observed that the net profit at the end of financial year 201112was 3.75% of the net sales.
Ratio analysis
PROFITABILITY RATIO
Gross profit ratioNet revenue- 316829 COGS cost of material consumed + changes in inventories + employee benefit expense + finance cost + other expenses =14475+449+133115+6057+76274 = 230370 Gross profit ratio= 17.18 There is a change of 12.46% in the gross profit ratio from last year. By increasing the sales price of the product the ratio can be increased, same while quantity produced have no effect on the improvement of gross profit. It may be due to decrease in the selling price of goods, without corresponding decrease in the cost of goods sold Or Increase in the cost of goods sold without any increase in selling price.
Return on assets
(PAT*100)/ total assets =(46851*100)/385959 =12.13 It signifies the utilisation of all assets to generate revenue and profit. Here the return on assets is very less. It signifies that an unhealthy conditions as profit generation would be affected by this less return on assets. Company might have to restructure the assets or increase the profit. Return on shareholders fund (PAT * 100)/share holder fund =(46851*100)/ 243525 =19.23 This ratio has a great importance to both share holders and the management of the company. It signifies the profitability from the share holders point of view. Shareholders decision is based on this ratio. As it has decreased from last year, it signifies that from shareholders Point Of View Company is not profitable and investors would not like to invest in the company.
Solvency ratios
Long term debt/ equity ratio 22022/243525 = 0.09 high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. It suggests a clear picture over long term debt of a company,
59985/799 =75.07 It is the ability of a company to pay interest out of profit. Here there is a decrease of the ratio from 99 of last year. It suggests that there is a degradation in companys interest ratio and it will face problems in payment of interest.
Quick ratio
liquid assets / liquid liabilities = 2.48 The quick ratio of the company in the year 2011-12 is 2.48 which suggests that out of every Re 1 of liquid liabilities the company has 2.48 in liquid assets to repay. This means that company is company has much liquid assets ih hand to pay back.
Cash flows are reported using the indirect method. The profit after tax for the year 201112 was Rs. 46,851 million whereas the cash with the company after adding the previous years cash was Rs. 62,328. The following table denotes the cash flow from the three types of activities:
Cash flow from/year Profit before tax Operating activities Investing activities Financing activities Net cash at end of year
Operating activities: The cash flow from operating activities is positive i.e. an inflow of money, it indicates an healthy sign for the company since it means that the company has received more money than it has spent. It can be said that the companys performance remained constant since the last two years as the trade payables were almost the same i.e. 38,922 in 2011-12 and 36,099 in 2010-11. The reason for a lower value of the net cash from the operating activies as compared to 2010-11 was due to the amount to be received from the sundry debtors which was as high as Rs.22, 471 millions , whereas in 2010-11 it was just Rs.14,675 million . But from these sundry debtors, only Rs.2373 million are considered doubtful which means that once the others are received, the net cash would increase considerably.
Investing activities: There is a net outflow of Rs.3398 million due to the investing activities which again is a positive sign because it shows that the company is investing in order to grow. The total investment that the company did in the financial year 2011-12 was of Rs.362640 million which included investment in fixed assets, in the money market and in subsidiaries. It received a total of Rs.359242 million from interests on its investments, sale of some fixed assets and due to maturity on some investments. But as compared to the previous year (2011), it invested less.
Financing activities: The figure of Rs. 17,238 in brackets indicates an outflow of cash which means that the company paid back more than the money it has raised. It can be seen that the company raised an almost equal amount of money as it repaid which means that the company generally goes for short term loans. The company raised Rs. 30,410 million as short-term borrowings from banks which is almost 50% of the amount raised. Also, the major component of the outflow of cash is the dividend that was paid. The difference between the cash flow amounts for the two financial years of 2011-12 and 2010-11 is due to the amount of repayment of borrowings done. In 2011-12, it repaid borrowings worth Rs. 68,671 whereas in 2010-11, it was worth Rs. 82,522.
It can be seen that the company is using it cash from operating activities to fulfill its investment and financing needs of providing the dividends due to its strong cash flow pattern from operations. The company is a steady state company wherein the net cash flow for the year 201112 was positive and was worth Rs.9,343. The company cannot be called as Cash cow as it has been seen that the company has raised the same amount of funds as it has repaid. It means that there is still some dependency of outer sources. Also, there has no buy-back of shares been observed.